Dec 526/00 M Print S5904
AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Workplace Relations Act 1996
s.45 appeal against decision Print Q1099
issued by Simmonds C on 21 May 2000
Karl Pawel
(C No. 33992 of 1998)
s.170CE application for relief in respect of termination of employment
K. Pawel
and
Advanced Precast Pty Ltd
(U No. 33326 of 1997)
SENIOR DEPUTY PRESIDENT POLITES |
|
SENIOR DEPUTY PRESIDENT WATSON |
|
COMMISSIONER GAY |
MELBOURNE, 12 MAY 2000 |
Appeal re termination of employment.
DECISION
[1] On 4 September 1998 this Full Bench refused to grant leave to appeal in relation to a decision by Simmonds C made in Melbourne on 21 May 1998 that the termination of Mr Pawel's (the appellant) employment by Freshmore Pty Ltd (the respondent) had not been at the initiative of the employer. Consequently he dismissed an application under s.170CE of the Workplace Relations Act 1996 (the Act).
[2] An application for prerogative relief was made in relation to this decision to the High Court of Australia and it was remitted by that Court to the Federal Court of Australia.
[3] On 10 December 1999 the Federal Court quashed the decision of the Full Bench and directed a writ of mandamus to the Commission to hear and determine the matter in accordance with law.
[4] Different reasons for the issue of the prerogative writs were given on the one hand by Branson and Marshall JJ and on the other hand by Dowsett J. The substantive reason given by Branson and Marshall JJ is as follows:
"40 We have formed the view that the reasons of the Full Bench, read as a whole, do demonstrate that the Full Bench misdirected itself as to the proper approach to be taken on the application for leave to appeal in a way which affected the exercise of its power to grant leave. It seems to us that either the Full Bench approached the application for leave to appeal on the basis that the Commissioner had exercised a discretion that was reasonably open to him, or it fell into an error of law as to the circumstances in which it would be appropriate for leave to appeal to be granted with the result that it asked itself the wrong question (ie whether the conclusion of the Commissioner was one reasonably open to him)." [Unreported V381 of 1999, p. 12, 10 December 1999]
[5] A different approach was taken by Dowsett J in the following passages:
"65 The approach taken by the Full Bench involved two steps. The first was to conclude that Commissioner Simmonds had applied a test which was consistent with the decision in Mohazab, based upon the 'reasonableness' of the instruction which led to resignation. The second step was to conclude that the Commissioner had found that the instruction in question was reasonable, that such a finding was open to him and that it was therefore not liable to be upset on appeal. With all respect to the Full Bench, Commissioner Simmonds clearly based his decision upon his view that `there was no breach, or threatened breach of an essential term of the employment contract . . ." . Whatever may be the meaning of the phrase, `at the initiative of the employer', it does not require breach, or threatened breach of the contract of employment. There would be little reason to offer statutory protection to employees against such action as there would be a remedy in contract. It is true that without statutory intervention, re-instatement would rarely, if ever, be available as a remedy, but Division 3 obviously does much more than remedy that deficiency in the common law, if such it be. Paragraph 170CE(1)(a) is obviously designed to give relief from a termination which is contractually valid. Paragraph 170CE(1)(b), with ss 170CK, 170CL, 170CM and 170CN, also has the effect of modifying the contractual right to dismiss. It cannot be argued that sub 170CE(1) is limited in its operation to termination initiated by the employer's breach, or threatened breach of the contract of employment.
66. If Commissioner Simmonds applied the incorrect test, the fact that it would have been open to him to dismiss the claim, had he applied the correct test, is quite irrelevant. The position may have been otherwise had the Full Bench concluded that the Commissioner, applying the correct test, must have dismissed the proceedings in any event. In argument before us, counsel for the second respondent submitted that the evidence was such that the appellant must fail, whichever test is applied, but this submission was, in my view, made without any attempt to formulate the appropriate test. As I have said, it would be inappropriate for this Court to propose a test in the absence of proper argument. It seems that the Full Bench will have an opportunity to do so." [ibid., pp. 22-23]
[6] The matter was relisted before us on 20 April 2000 when Mr McDonald, a solicitor who appeared for the appellant, made the following submissions:
"Before asking the Commission to do that I would merely submit that in view of the decision of the Federal Court the method of dealing with these matters has now been better set out, and that in the light of the majority decision in that Full Bench of the Federal Court decision, we would submit that the Commission ought now to find that the appeal, leave to appeal ought to be given and that an award of compensation ought to be made, and reinstatement ought to be given to the applicant.
And we say that this Full Bench ought to do that and not ask Commissioner Simmonds to do that, because there is a full and substantial transcript upon which the Commission can refer, there is a sophisticated decision of Commissioner Simmonds in which he puts forward findings, and we would submit in the circumstances therefore that it would be possible for the Commission now to make an order in favour of the applicant bearing in mind those essential findings of fact, findings which support the contention that first and foremost the act that caused Mr Pawel to leave his employment was at the initiative of the employer.
It was the employer that directed full-time welding, and in doing so triggered the termination. It was not even in the terms of the minority judgment. Something of a workplace dispute. It had got far beyond that. It is not a case where somebody has a little bit of a tip with the employer and gets huffy and wanders off. It was far more significant, and the transcript shows that. It was a situation where Mr Pawel had no alternative; your health is endangered, your eyesight is endangered, but - and the employer knows it, because they have had medical reports." [transcript p.34]
[7] Mr Martin of Counsel who appeared on behalf of the respondent, conceded in the light of the decision of the Court that it was an appropriate case for the grant of leave to appeal. He requested the Commission not to make a finding on the issue of whether the termination was at the initiative of the employer because, he submitted that question in fact overlaps with the question of whether the termination, if it be a termination, by the employer is harsh, unjust or unreasonable. Mr Martin submitted because of cost, the extremely time consuming and difficult piece of research necessary to address the issue of when a termination might be at the initiative of the employer which was suggested in the decision of Dowsett J in the following passages, had not been undertaken. Dowsett J in his minority decision in the Federal Court, when the matter was before it, said
"56 If the word `initiative' is not to be construed as involving an element of intention on the part of the employer, then it must a least require a causal relationship between some action or inaction on the part of the employer and the employee's decision to resign. Causal relationships are often matters of degree. The extract from Mohazab cited above demonstrates a certain ambiguity in this regard. Their Honours suggested that the employer's act must result `directly or consequentially in the termination . . .'. This requires a causal link between the conduct of the employer and the employee's decision to resign. Their Honours then suggested that the test required that `the employment relationship is not voluntarily left by the employee'. This implies rather more than mere causation. In the last sentence of the extract, their Honours appear to have adopted a `but for' test, stating:
`That is, had the employer not taken the action it did, the employee would have remained in the employment relationship.'
57 Thus three possible causation tests are posed in this short extract from the judgment, including:
. Direct or consequential causation;
. Compulsion to resign; or
. A `but for' test.
58 When an employee resigns, he or she has usually reached a decision, taking into account many factors. Some may be entirely personal and unrelated to any `misconduct' on the part of the employer. An employee may resign because he or she has been passed over for promotion, has not received a pay increase, has a more attractive job offer or, as in the present case, finds aspects of his or her work uncongenial or undesirable. There can be any number of reasons for an employee to feel dissatisfaction, and there is always the possibility that it will lead to resignation. That dissatisfaction will often have been arguably caused (in part or in whole) by a decision or decisions of the employer. If `initiative' implies only causation, it will usually be arguable that the employer has `initiated' the termination. Although it may be good managerial practice to offer job satisfaction, it cannot be guaranteed. Many dissatisfied employees resign. The process prescribed in Division 3, which depends on termination, is too cumbersome to have been intended to resolve issues of that kind. I do not accept that any employee whose decision to resign was, to some extent, motivated by action or inaction on the part of the employer, may initiate proceedings pursuant to subs 170CE(1). Mere `causation' or `motivation' will not satisfy the requirement that the termination be at the initiative of the employer. For similar reasons, I doubt the efficacy of any `but for' test.
59 As to `compulsion', it is difficult to contemplate circumstances in which it can be said that an employee has been compelled to resign, but not dismissed, unless one accepts the somewhat bizarre reference in the course of argument to an employer holding a gun to the employee's head. Mohazab and the present case are examples of circumstances in which the relevant employee may well have seen it as in his best interests to resign, but it is hard to see how it can be said that either did not leave voluntarily. I wish to add only that the proper construction of the phrase `at the initiative of the employer' may depend upon an analysis of the prescribed circumstances in which relief may be granted and the overall purpose of Division 3. I suspect that the construction exercise may be made more difficult if one is too firmly wedded to the bifurcated approach urged by the appellant in this case.
60 Unfortunately, these questions were not argued before us, and so it is not appropriate that I seek finally to resolve them. I consider that this matter must, in any event, be remitted for reconsideration. Hopefully, the Full Bench will receive more assistance." [Unreported V381 of 1999, pp. 18-20, 10 December 1999]
[8] In light of the decision of the Court and having regard in particular to the concession by Mr Martin made above, we grant leave to appeal.
[9] We turn then to determine the appeal. We turn first to the issue of jurisdiction and in so doing we decline to accept the submission by Mr Martin that we should not consider this issue. This involves the determination of whether the appellant's employment was terminated by the employer. It was not contended before Simmonds C that there was any direct termination of the employment by the employer. Rather, it was submitted there was "a constructive dismissal occasioned by the requirement that Mr Pawel undertake welding duties with such duties being a threat to his health". Simmonds C summarised the appellant's case as follows:
" In summary, the applicant's case was that he originally sought and obtained employment in October 1995 with the company as a concreter, however on engagement he was to carry out welding of steel reinforcement on a backup basis. Prior to commencement he had undertaken a medical examination which indicated a weakness with his left eye. In the course of his employment he indicated he did not wish to continue in a welding position because of that eye problem and the potential for damage to his right eye. He continued in the welding position until some weeks before the employment terminated, when he was transferred to steel fixing. Possibly as a consequence of perceived poor performance, but primarily because the `full-time' welder successfully sought and obtained a temporary transfer to other duties, he was transferred to welding duties again. This decision was conveyed to him by the Factory Manager on 1 October 1997. There is dispute as to whether he was told this was a temporary or permanent transfer. He believed it to be permanent. On the next day, when specifically required to weld, he claimed to become nervous at the prospect, found he could not concentrate, went to his foreman and said:
`"Look, I can't take this. I'm just stressing out. I'm going to have to go and - look, I'm going to have to give notice. I just can't cope with this anymore." I indicated that I was going to go to the doctor's because I was - like I say, I was shaking, I was in a hell of a lot of stress.' [Transcript p.22]" [Print Q1099 p.1]
[10] Simmonds C also made a number of factual findings which Mr McDonald on the relisting of this matter, did not challenge. They were:
". the applicant's duties had, for almost the whole of his employment, involved welding duties;
. there was no objective threat to his health and safety involved in the requirement that he undertake welding, as long as it was not on a continuous basis;
. the welding he was required to do was not continuous, in that it was not a full-time requirement. On rare occasions he could have been required to weld for about 70 per cent of his time (on my estimate, following what was shown in the videotape recording taking into account the applicant's own evidence).
. until some weeks before his termination, while unhappy with welding duties he had carried them out without apparent difficulty;
. the company required multi-skilled employees;
. the alleged threat to him from the Factory Manager was made when that person was a foreman, and occurred many months prior to the termination; and
. there is no third party evidence of the applicant suffering stress as a result of the requirement to weld. The evidence from Mr Corbett is to the contrary. Moreover, the applicant did not go to a medical practitioner, but to his solicitor in response to the alleged stress." [ibid., p.3]
[11] The jurisdictional question for us to determine is having regard to those factual findings as properly expressed, whether the respondent's actions were such as to amount to termination of employment at the initiative of the employer and it is to be noted that on this issue there was a clear division between the majority and minority decisions in the Federal Court. The majority made this observation:
"27 The approach adopted by the Full Bench of the Commission in refusing Mr Pawel leave to appeal was to consider whether the instruction given to Mr Pawel by his employer was a reasonable one. The Full Bench said:
`If an employer's instruction is consistent with the terms and conditions of an employee's contract of employment and the instruction is a reasonable one and the employer insists upon it then in our view the giving of the instruction cannot be regarded as the employer acting in such a way as to leave the employee in a position where he felt he had no other option but to leave the employment. Put another way we do not think [that] the test applied by Simmonds C was in its operation consistent [inconsistent?] with Mohazab. The real question is whether the instruction was a reasonable one.'
28 It may be observed that Mohazab provides little, if any, support for the approach adopted by the Full Bench of the Commission. That approach might well be thought to involve a measure of confusion between the separate issues of first, whether the employment was terminated at the initiative of the employer and secondly, if it was, whether the termination was `harsh, unjust or unreasonable.' This is not to say that there can never be factual overlap between these two issues. There may well be." [Unreported V381 of 1999, p. 9, 10 December 1999]
We have already set out in this decision the observations of Dowsett J in relation to this issue.
[12] In Mohazab v. Dick Smith Electronics Pty Ltd (No 2) (Mohazab) the Full Court made these observations:
"In these proceedings it is unnecessary and undesirable to endeavour to formulate an exhaustive description of what is termination at the initiative of the employer but plainly an important feature is that the act of the employer results directly or consequentially in the termination of the employment and the employment relationship is not voluntarily left by the employee. That is, had the employer not taken the action it did, the employee would have remained in the employment relationship. This issue was addressed by Wilcox CJ in APESMA v David Graphics Pty Ltd (unreported, Industrial Relations Court of Australia, 12 July 1995, Wilcox CJ). His Honour, at p 3, referred to the situation of an employee who resigned because `he felt he had no other option'. His Honour described those circumstances as:
`. . . a termination of employment at the instance [of] the employer rather than of the employee.'
And at p 5:
`I agree with the proposition that termination may involve more than one action. But I think it is necessary to ask oneself what was the critical action, or what were the critical actions, that constituted a termination of the employment.'" [(1995) 62 IR 200 at 205-206]
[13] It is plain that the Full Court in Mohazab considered that an important feature in the question of whether termination is at the initiative of the employer is whether the act of an employer results directly or consequentially in the termination of the employment and that the employment relationship is not voluntarily left by the employee. However, it is to be noted that the Full Court described it as an important feature. It plainly cannot be the only feature. An example will serve to illustrate this point. Suppose an employee wants a pay rise and makes such a request of his or her employer. If the employer declines and the employee, feeling dissatisfied resigns, can the resignation be said to be a termination at the initiative of the employer? We do not think it can and yet it can be said that the act of the employer i.e. refusing the pay rise, has at least consequentially resulted in the termination of the employment. This situation may be contrasted with the position where an employee is told to resign or he or she will be terminated. We think that all of the circumstances and not only the act of the employer must be examined. These in our view, will include the circumstances giving rise to the termination, the seriousness of the issues involved and the respective conduct of the employer and the employee. In the instant case the uncontested factual findings are that the applicant had for almost the whole of his employment performed welding duties; that there was no objective threat to his health and safety involved in the requirement that he undertake welding duties so long as it was not on a continuous basis and that the welding he was required to do was not continuous.
[14] In those circumstances the employer's requirement that the appellant carry out welding duties was plainly a reasonable instruction and it was not an instruction of a character which in our view would enable the appellant to say that he had no option but to terminate his employment. In our view, different considerations would arise if the instruction was unreasonable or had placed the employee under some sort of unfair pressure. This is not the case here. Accordingly, we are of the view that there was no termination of employment at the initiative of the employer. The appellant knew of the requirement to weld and chose to leave the employment rather than weld.
[15] However, even if we were wrong in respect of that matter and the Commission had jurisdiction to entertain the claim we would not be of the view that the determination was harsh, unjust or unreasonable. In our view, having regard to the findings of Simmonds C, the employer's requirement that the applicant undertake welding duties was a reasonable requirement. It posed no objective danger to his eye sight provided the welding was not continuous welding. It is clear from the findings of Simmonds C that the welding was not continuous welding and that the appellant had welded (with the exception of a few weeks before the termination) for the whole of his period of employment with the respondent. Moreover, the findings reveal that while the appellant did not like welding he performed the work without apparent difficulties. The findings also indicate the employer required the employees to be multi-skilled.
[16] Where in the circumstances outlined above termination of employment had followed a refusal to perform welding duties the termination could not in our view be described as harsh, unjust or unreasonable. Rather, there was a valid reason for the termination of the appellant connected with the operational requirements of the undertaking. None of the other factors in s.170CG(3) bears upon this mater. We reject the application.
[17] For these reasons we dismiss the appeal.
BY THE COMMISSION:
Appearances:
A. McDonald of Counsel on behalf of K. Pawel.
D.P. Martin of Counsel on behalf of Freshmore Pty Ltd.
Hearing details:
1998.
Melbourne:
July 31.
2000.
Melbourne:
April 20.
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